Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

Avoiding Chase Bank Checking Account Monthly Fees

In the last few months we have been learning of the new monthly fees at Chase Bank and the new rules that make avoiding them harder. The easiest way to avoid monthly maintenance fees at Chase is to switch to internet banks, community banks or credit unions which offer real free checking accounts. Don't forget that the vast majority of reward checking accounts are also free checking accounts. However, in my last post on Chase Bank, several readers noted some reasons why they still want to keep their Chase checking accounts. One reader praised Chase's ACH system and bill pay:

I still bank with Chase, they have the fastest ACH system around and no holds on the funds like Ally does. Bill pay is almost immediately paid and no wait or scheduling needed.

Another reader mentioned Chase QuickPay and QuickDeposit:

There are actually a couple of features of Chase's checking account that I would like, namely their remote deposit and direct person-person payments...

In addition to those who like some of Chase Bank's services, there's also the issue of the extra work that's required to switch banks. One reader lamented the reason he hasn't switched:

The thought of untangling all my electronic payments / bill pay is the only thing holding me back

For those staying with Chase, you will have to be more careful to avoid fees. As I mentioned in my last post, Chase's new fee policy has taken effect, and it applies to both new and existing checking accounts. This change was also noted in this Sunday USA Today article.

Easy Alternative to Direct Deposit

Customers used to be able to avoid the monthly service charge by having direct deposit of any amount. Now customers need to have monthly direct deposit of at least $500. One direct deposit must be at least $500. Multiple smaller direct deposits that add up to over $500 don't qualify. The USA Today article described how this affected one person:

Amilivia, a part-time worker at Target, receives several direct deposits to her account each month that together total more than $500. But under Chase's new rules, that didn't matter.

A question that readers have asked is whether the direct deposit really needs to be a direct deposit from an employer. Will an ACH transfer initiated at another bank qualify? A friend has confirmed that he was able to avoid the $12 monthly fee by initiating a $510 ACH transfer from his Discover Bank savings account. He said he added an extra $10 to make it look less suspicious, but I doubt that's necessary. I can't say if this will always work, but Chase does appear to have a history of allowing ACH transfers to meet the direct deposit requirements. One reader commented in the last post that Ally ACH transfers were used to fulfill the direct deposit requirement at Chase.

So if you want to avoid Chase Bank's monthly fees, the ACH transfer option appears to work at least for now. This will require that you have another bank account where it's easy to initiate ACH transfers. The savings accounts at Discover Bank and Ally Bank are both good options. They have no monthly fees, and they make it easy to initiate ACH transfers. In addition, they pay interest with rates much higher than what you can get with a Chase savings account. One advantage of Ally over Discover is that Ally also offers a free interest checking account. If you open this checking account, you may quickly find that you don't really need that Chase checking account after all.

Thank you for contacting the Internet Service Center. Ican certainly understand your concern in regards to theDirect Deposit on your account. I sincerely apologize forany inconvenience.

In response to your inquiry, please be advised that theACH credit from an external account is not considered aDirect Deposit. Please note that Direct Deposit comes fromyour place of employment, or pension, or government.External account are account that you transfers betweenaccounts that you are signers on.

Again, I sincerely apologize for any inconvenience you maybe experiencing at this time. Please be assured that wevalue you as a customer and wish for your experience withChase to be one of satisfaction and ease.

If you have any questions or require further assistance,please e-mail us via the Secure Message Center or contactour Internet Service Center at 1-877-242-7372.

Last week I withdrew the money I had in a Chase special savings account for which I received $100 interest for investing $10,000 for three months. I was told that if I wanted a check paid to me for the money it would cost me $8. I took the money in cash instead - that was still free.

I have been doing banking for over 40 years and never have I ever had to pay for a check for withdrawing funds. Clearly, Chase doesn't give a **** about customers anymore and I've closed my accounts with them.

FYI: I'll share this excerpt from a conversation I had via chat with a Chase Bank customer service representative on 12/13/2010 regarding how to avoid fees on my Total Checking account:

you: I forgot. One more thing (sorry): One way to avoid the $12 monthly service fee on the new Chase Total Checking is to have a minimum $500 direct deposit each month. The fine print says that it must be an ACH credit and may include payroll, pension, Social Security, etc. This implies that it does not HAVE TO be payroll, pension, Social Security, etc. but ANY ACH credit to the account. Am I reading this correctly?

Lillian: Yes that is correct.

you: So I can have $500 or more transferred from my online Discover Bank savings account to my Chase Total Checking monthly and avoid all service fees?

Lillian: You can do so as long as it is a direct deposit.

you: What other type of deposit would it be other than a direct deposit? If it is an ACH credit to my account, isn't that a direct deposit? Please clarify.

Lillian: Yes it would be direct deposit if coming as ACH.

you: Thank you for all your help as I contemplate what to do now that my Basic Checking account is being changed.

I have or have had checking accounts with the following banks and CU's. Every one of them offers totally free checking accounts with no minimum balance or DD requirements. As far as I know, they have no geographic restrictions, and some of them even give you free checks. Before you pay a fee to BOA, Citi, or Chase, check with:

All outside initiated ACHs are direct deposits, since all direct deposits come as ACHs but the sub code that is embedded in the ACH either makes it direct deposit or just transfer from one account to another using the ACH. Be careful when dealing with CSR, they all have a variation of their understanding of ACH, but not the real inside working of the ACHs.

Absolutely correct.I used to work in a banking call center, and I overheard all kinds of false info being given out from the reps around me. Many reps -- especially newer ones -- just shoot from the hip when answering questions that they don't actually know the answers to. It's pretty ridiculous.

Direct Deposit (credit) - Direct deposit is a credit application that transfers funds into a consumer’s account at the Receiving Depository Financial Institution. The funds being deposited can represent a variety of products, such as payroll, interest, pension, dividends, etc.

Note that the Chase Bank wording is "The direct deposit, which must be an ACH credit, may include a payroll, pension or government benefit payment, such as Social Security."

The key, I should think, is that is says that the direct deposit MAY include and not MUST include payroll, pension, etc. The transfer from my Discover online savings account to my Chase checking account is currently listed as a "PPD" transaction on my Chase checking statement.

The direct deposit MUST be an ACH credit, and PPD identifies it as such on my checking account statement.

With this information in hand, I cannot see how Chase can argue with this method as a means to avoid the monthly service fee.

This is the original terms and condition from Chase, you may talk to ACH and she or he may say anything to you since you agree that info not to be binding due to this disclosure:

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In other words you don't count as a being and they can do what ever they please.

It's great until you have a problem. As I did recently. Chase said 1 bisiness day for a payment, I scheduled for one week in advance, payee says received late (1 day after due date, 1 week and 1 day after it was sent). I called payee, they said it was an electronic payment received when they said it was (1 week later than should have been). I submitted an inquiry with Chase for this payment, indicating that I was charged late fee, etc., and all they did was to say they checked their system, and the payment was sent when scheduled, gave me some internal tracking number, and that's that. No attempt to contact the payee or offer to refund the late fee or anything else -- which is what I'm used to with bill pays provided by CheckFree. So I'm not using Chase bill pay any longer. (I did get the payee to refund the late fee, which they did as a "one-time courtesy to me", which is not at all a satisfactory outcome to me.)

All externally initiated (sourced from another financial institution) electronic funds transfers are accepted by the receiving institution as a Direct Deposit AKA "Pre-Authorized Credit".

By definition, this means the funds need no verification, since they've already been authorized by the sender.

ANY & ALL pre-authorized credits are "Direct Deposits", period.

However, the receiver may choose not to count non-payroll or non- government payments as meeting their unique definition, but that doesn't change the fact that those payments are still indeed direct deposits.

Another way of looking at it, is that all direct deposits are not necessarily valid to meet the subjective criteria made up by the institution offering the supposedly "free" checking account-

I like Chase. One day availability for deposited checks, Quick Deposit from my Droid phone and no lines when I visit my local branch.

If you can afford it, fees are easily avoided by leaving a minimum balance of $1500 in the basic checking account. That's forfeiting about a dollar and a half a month in interest you could earn elsewhere. Before taxes! :-)

And Chase has enough promotions of $100, $150 or $200 for checking and savings accounts which you can avail yourself of if you were of such a mind.

bbug, You're missing the big picture (Chase maximizing profits by artibrary and mutating fee traps). It's not a matter of forfeiting $1.25/mo. - reasonable for the value of services provided. It's the intentional gouging of customers that deviate insignificantly in the minefield. This isn't the basis of a "valued customer relationship", despite CSR script recitations. It's a primordial hunting expedition - constantly calculating, calibrating and taking aim at prey. Assessing the odds, seeing how survival of the fittest handsomely lines their pockets at the expense of fleecing disadvantaged victims, real winners choose wisely and run (do not walk) away.

A way to avoid Bank charges you can make a repetitive deposit into your saving account, it can be of any amount i currently deposit $100 dollars monthly. It cuts out all checking account maintenance fees and it is also a great way to start saving some money.

Are you sure about waiving the checking account fee for an automatic monthly transfer to savings? Their website has no mention of this. It says the savings account fee is waived, but doesn't say the same for the checking account fee. Could it be the recent changes took away that benefit?

I wasn't agreeing with their business practices or customer relations policies, just stating that I like them for what I use them for. For my purposes, they deliver what I need at a cost that's acceptable.

We have used Chase since they took over from WAMU and I can't say I dislike them. We do have SS deposited there and keep a tidy balance. So far we have had no fees and I kind of like the way all accounts show up with one log in, even credit cards. Can't say the same for Wells Fargo, the young staff at the branches are exceptionally polite and nice but I feel that they are out to nickel and dime. The cost of new checks is way out of line at WF.

im the same ive been with them since they were wamu. And ive olny had one or two problems with them each of witch were fixed as soon as posable. my card got lost and of all time for it to happen christmas season, so it to two trys to get a new card. But i have a collage account so i dont have to deal with the monthly fee chase gives us kids a break. nanananan

We have 4 accounts with Chase with a combined balance over $35,000. Two of them are used for paying bills so we transfer enough each month to pay bills. At $12/month x 2 accounts = $288/year for the "privilege" of allowing them to use my cash. Bye bye Chase...go to hell you greedy a-holes!

Ok well I haven't found a clear answer to the ACH direct deposit dilemma but I did notice that when you transfer money from your Paypal account to your bank....it shows as "ACH Credit - Paypal PPD" on my statement....I have only had my account for 1 month so far so I don't know if I will get charged retro for the monthly checking fees.

Does Chase offer a life insurance policy with the Premier checking account? I thought when I opened my account I was told this account offered a $1000.00 policy and I to put down a beneficiary. When I inquired at the local branch they told me that wasn't correct.